Ransomware, Unicorns and Consolidation, Oh My: 2018 Cloud Trends

If 2018 is anything like 2017 we’re in for a ride—especially when we’re talking about the cloud market. Cloud solutions may lack some of the drama we’ve seen in American politics this past year, but those of us involved in the cloud transformation know it’s an exciting time to be a part of this growing, innovating space.

We think 2018 is going to be just as exciting, both at the company and industry level, with hybrid solutions ready to tackle pressing issues such as ransomware and with cloud companies facing an interesting funding market. Here are four predictions that we think will help drive the cloud market in 2018.

Dealing With Ransomware a Different Way

Ransomware is a hot topic, and for good reason. Ransomware attacks continue to dominate the news and have even become mainstream enough that every organization, small and large, is both aware and alarmed. Protecting against ransomware attacks is tricky. There’ll always be a new villain that comes up with a new vulnerability to exploit. So, even given the best security software, companies continuously live with the probability that at some point they be under attack.

Because preventing attacks altogether is simply impossible, every organization will be exposed. So, what can a company do? The new “firewall” against ransomware is actually data protection, but rather than completely blocking an attack, it sets up a company to recover its data and workloads almost instantly with confidence. Data protection—backup, disaster recovery and so on—isn’t new, but 2018 is the year when it will gain traction as a solution to ransomware woes.

Let’s take this idea one a step further. Companies that employ data protection often make a common mistake: trying to protect only certain “important” workloads or data sets. Now, they’re starting to realize that losing even “unimportant” workloads—such as test/dev—can be crippling. For example, losing test/dev can keep developers out of pocket for literally weeks while IT figures out how to get them back up and running.

So, going beyond spotty, targeted data protection, ubiquitous data protection across the enterprise will take off in 2018.

Cloud Adoption Is Actually Driven by the Business

The cloud model is mature from the vendor side. Numerous offerings are available, many big and small players are involved, and the market provides a variety of choices that can serve most customer needs. On the adoption side, however, the cloud remains nascent. The statistics show there’s plenty of room for more adoption, and vendors still have a lot of convincing to do in their pitches and responses to RFPs. In short, there continues to be plenty of workloads in the data center would be better suited to the cloud.

To drive adoption, cloud vendors must continue to make more than just a technical case for cloud solutions; they must make the business case to C-level executives. In 2018, this pitch will have to include one important aspect: total cost of ownership. Yes, the stock market is strong. Yes, many companies are in growth mode and are looking to AI, machine learning and other technologies to increase top-line revenue.

Despite this growth outlook, IT departments continue to face tight budgets and limited resources. When pitching, cloud projects must still prove ROI, including solid TCO numbers. Your tech can help growth and provide a great platform for machine learning, but it must also answer the TCO question and help ease the burden on overstretched IT departments.

Secondary Storage Comes Together

Remember back in 2016 how the hyperconvergence market consolidated? HPE bought Simplivity and other dominoes fell. As 2018 begins, the secondary storage space is beginning to resemble that active 2016 period. Specifically, more than a handful of strong vendors are in the secondary storage area. Likewise, the market is strong and growing, as customers look to solve issues that have been dogging them for years.

Strong vendors in a strong market? It’s a sure recipe for consolidation. That may be where the similarities to the hyperconvergence market end, though. Remember, some of the consolidation in that space involved struggling companies and produced some sad outcomes. With secondary storage, look for surprising premiums when acquisitions take place.

In fact, let’s really go out on a limb. There’s a strong possibility that 2018 could be the year that one of the growing secondary-storage vendors is acquired. Yes, we’re talking about Actifio, Rubrik, Cohesity and others. It would change the backup market fundamentally and set up quite a set of predictions for 2019.

Unicorns Disappear

In 2017, Tintri and its investors took the giant step of pushing for an IPO rather than taking on more equity-based working capital. It was a bold move, but it ultimately failed to deliver as the company hoped; Tintri had to reduce its share price and push back its IPO date. Even with those moves, it wasn’t long before the company was trading below its reduced IPO price. This is a worst-case scenario for companies with strong revenues (Tintri was pulling in hundreds of millions of dollars) but big losses.

What this situation shows is that capital markets are seeing some exhaustion; between Tintri and other 2017 exits there is little overhang and no more unicorns with grossly inflated valuations when it comes to primary storage. The next time we see billion-dollar valuations, they’ll be based on actual market and business-growth metrics.

From your company to the larger market, those are the trends we see coming to life in 2018. Agree or not, one thing is for sure: we’re in for another year filled with innovation, market evolution and surprises along the way.

About the Author

Laz Vekiarides is CTO for ClearSky Data. Before ClearSky Data, he was an EqualLogic and Dell executive. Laz is an expert in data storage, virtualization and networking technologies, and holds several storage-technology patents.

1 comment

[…] "The statistics show there's plenty of room for more adoption, and vendors still have a lot of convincing to do in their pitches and responses to RFPs," DataCenter Journal contributor Laz Vekiarides wrote. "In short, there continues to be plenty of workloads in the data center that would be better suited to the cloud." […]